Age of Exploration

Where Did European Powers Get Their Silver?

Silver was the most important commodity in the early modern global economy. Between the sixteenth and eighteenth centuries, European powers obtained silver from a combination of sources: the great mines of the Spanish Americas, the gold and silver deposits of West Africa, the mines of Central Europe, and the loot of various conquests and pirate raids. The silver obtained from these sources fueled European commerce, financed the great wars of the period, and underwrote the rise of European global trade. Peter Bakewell’s Mining and the Independent Economy in Colonial Potosí (1985) is the standard account of the great South American mine, and Dennis Flynn and Arturo Giráldez’s Foundations of World Trade in the Sixteenth and Seventeenth Centuries (2008) is the indispensable treatment of the global flow.

The broader context of silver’s role in the early modern economy is treated on our precious metals and commodities cluster page. This page focuses on the specific sources: the mines, the labor systems, the global flows, and the political consequences.

The most important single source of silver for European powers was the New World — particularly the great silver mines of Potosí in modern Bolivia and the mines of Mexico. These mines produced a flood of silver that transformed the global economy and laid the foundations of European capitalism. The story of where European powers got their silver is therefore central to understanding the history of early modern trade and the rise of the colonial empires.

The Silver Mines of the Spanish Americas

The discovery of the great silver deposits of the Spanish Americas in the mid-sixteenth century transformed the European economy. The two most important mining regions were:

Potosí (in modern Bolivia) — A massive silver deposit discovered in 1545 in the high Andes at an elevation of over 13,000 feet. The mountain of Potosí became the site of one of the largest silver-mining operations in human history. At its peak in the early seventeenth century, Potosí was one of the largest cities in the world, with a population of perhaps 150,000–200,000 people, including Spanish, indigenous Andean, and enslaved African workers. The silver was extracted using the “patio” process (developed in 1554 by Bartolomé de Medina), in which ore was crushed, mixed with salt, mercury, and water, and then left to react in the open air before being heated. The process required enormous quantities of mercury, much of which was obtained from the mine of Huancavelica in Peru.

Zacatecas and Guanajuato (in modern Mexico) — A series of silver deposits discovered in the 1540s, mostly in the arid northern regions of New Spain. The Mexican mines were developed on a large scale in the late sixteenth and seventeenth centuries, and they produced silver continuously until the nineteenth century. Mexican silver was particularly important for the Manila Galleon trade, in which silver was shipped from Acapulco to Manila to pay for Asian goods.

The total registered silver production of the Spanish Americas between 1500 and 1800 has been estimated at approximately 40,000 metric tons, with another 10,000–20,000 tons believed to have been smuggled unregistered. Annual production peaked in the early seventeenth century at around 400–500 tons per year, then declined before recovering in the late eighteenth century as new Mexican mines came online. This was an enormous flood of silver by the standards of the time, and it had major consequences for the global economy.

The Labor of the Silver Mines

The silver mines of the Americas were worked by a combination of forced and enslaved labor, and the human cost of the silver trade was enormous. The Spanish used the mita, a system of forced labor inherited from the Inca Empire, to compel indigenous Andean workers to labor in the mines of Potosí. The conditions in the mines were horrific, with workers laboring in cold, poorly ventilated tunnels and suffering from mercury poisoning, lung disease, and accidents. The death toll at Potosí over the centuries of its operation was in the millions, and the demographic decline of the indigenous Andean population is among the great catastrophes of the early modern period.

Enslaved Africans were also used in the silver mines, especially in the Mexican mines, where they worked alongside indigenous laborers and free Spanish miners. The treatment of enslaved workers in the mines was brutal, and mortality rates were high. The silver that flowed from the Americas to Europe was thus produced at enormous human cost, and the wealth that it generated must be understood given this suffering.

The Transport of American Silver

Once extracted, the silver was refined and minted into coin at colonial mints. The most important mints in the Spanish Americas were at Potosí, Lima, Mexico City, and Bogotá. From the mints, the silver moved to the major Spanish colonial ports, primarily Veracruz (for Mexican silver) and Portobelo or Cartagena (for Peruvian and Bolivian silver). From there, the silver was shipped to Spain, where it arrived at the port of Seville (and later Cádiz).

The Spanish Crown taxed silver shipments heavily. The quinto real, or “royal fifth,” required that one-fifth of all silver produced in the Americas be remitted to the Spanish Crown. The taxes, together with various other duties, made silver shipments a major source of revenue for the Spanish state. The Crown used this revenue to fund its wars, its administration, and its religious establishments, and the steady inflow of American silver was central to Spain’s emergence as the dominant European power of the sixteenth century.

The Global Flow of Silver

A significant share of the American silver that arrived in Europe did not stay in Europe. It was re-exported, either overland or by sea, to pay for Asian goods. The Chinese market was particularly important, since the Chinese had little interest in European manufactured goods but had a strong demand for silver, which was used as the basis of the Ming and Qing monetary systems.

The flow of silver to China happened through several channels. The Manila Galleon trade, which operated from 1565 to 1815, was one of the most important. Spanish galleons carried silver from Acapulco in New Spain to Manila in the Philippines, where it was used to purchase Chinese silk, porcelain, and other goods. A large share of the silver arriving in Manila ended up in China, where it funded the Chinese economy and stimulated the growth of the Chinese market.

The Dutch and British East India Companies also shipped silver to Asia, particularly to India and China, to pay for the goods they imported to Europe. The silver used in this trade came partly from the Spanish Americas (transhipped through Amsterdam and London) and partly from European mines.

The volume of silver flowing to Asia was substantial. Historians estimate that, by the late seventeenth century, perhaps a quarter or more of all the silver mined in the Americas was ultimately shipped to China. The global flow of silver is among the most important features of the early modern economy, and it prefigured the even more globalized trade of the nineteenth and twentieth centuries.

European Mines

Although the Spanish Americas were by far the most important source of silver for European powers, the mines of Central Europe also produced significant amounts. The most important of these were the mines of the Erzgebirge (Ore Mountains) on the border of modern Germany and the Czech Republic, including the famous Joachimsthal (Jáchymov) mine. The Joachimsthal mine was the source of the silver “thaler” — the coin that gave its name to the English word “dollar.”

Central European silver production expanded significantly in the late fifteenth and early sixteenth centuries, contributing to the “price revolution” of the sixteenth century, in which the European money supply grew rapidly and prices rose accordingly. By the seventeenth century, however, many of the Central European mines were being depleted, and the relative importance of American silver grew.

West African Gold and Silver

West Africa was an important source of gold rather than silver, but the gold and silver trades were closely linked. The Akan goldfields of modern Ghana were the most important source of gold in the early modern world, and the gold was used both in African commerce and in trans-Saharan trade with the Mediterranean. The gold was generally not exported to Europe in large quantities, but it shaped the African commercial systems that supplied enslaved Africans to the Atlantic slave trade.

European attempts to obtain African silver — most of which was as coins, including Spanish pieces of eight and Portuguese cruzados — were also important. The European merchants trading along the West African coast were generally more interested in gold than in silver, but silver coins were widely used in the African trade, and many European coins have been found in African archaeological sites.

The Pirate and Privateer Factor

Although most European silver came from legitimate mining operations, the activities of pirates and privateers also contributed. Spanish silver shipments crossing the Atlantic were vulnerable to attack by English, French, and Dutch privateers, and major captures occasionally provided substantial windfalls. Sir Francis Drake’s capture of the Nuestra Señora de la Concepción (the “Cacafuego”) in 1579 yielded an enormous treasure, and the attack by Francis Drake and his men on the Spanish silver train at Nombre de Dios (on the Caribbean coast of present-day Panama) in 1573 was another major event.

The Dutch, in particular, used privateering as a deliberate strategy to weaken the Spanish Empire and to obtain bullion. The Dutch admiral Piet Pieterszoon Hein’s capture of the Spanish silver fleet at the Battle of the Bay of Matanzas in 1628 was a major event, and the Dutch West India Company was founded in 1621 in part to coordinate privateering attacks on Spanish shipping.

The relative importance of pirate and privateer silver is debated by historians. Most estimates suggest that the volume of silver obtained through piracy and privateering was small relative to legitimate trade, but the symbolic and political effects were significant, and the threat of privateering did much to encourage the development of European navies.

The Consequences of the Silver Trade

The silver trade had enormous consequences for the global economy. In Europe, the influx of American silver fueled the “price revolution” of the sixteenth and seventeenth centuries, in which inflation rose greatly as the money supply expanded. The price revolution disrupted traditional economic relationships, contributed to the social and political upheavals of the period, and helped finance the rise of European capitalism.

In Asia, the silver inflow stimulated commerce and supported the growth of sophisticated market economies, particularly in Ming and Qing China. The Chinese demand for silver was so great that it shaped the global silver trade, with European traders traveling to China specifically to obtain silver in exchange for their goods.

In the Americas, the silver trade led to the development of vast mining operations, the growth of cities like Potosí, Mexico City, and Lima, and the establishment of complex colonial administrative systems. The silver trade also had devastating consequences for indigenous populations, who were forced to labor in the mines and who suffered from the introduction of Old World diseases.

The silver trade is, in sum, a central feature of the early modern global economy, and it illustrates the deep interconnections that had developed between Europe, the Americas, Africa, and Asia by the seventeenth century. The story of where European powers got their silver is therefore central to understanding the broader history of the Age of Exploration and its legacy.

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